Why You Need GAP Insurance and What It Entails

An insurance coverage protects against the occurrence of a certain risk. If you are involved in a car collision, then you will be compensated by the insurance company.

At times, the book value of the car may be less than the amount one owes on the car financing. In such a case, the compensation of the car will be less than what you will pay to the financier. This means that you will have to pay some money out of pocket to clear the lender's balance.

The GAP or the guaranteed asset protection is a type of auto insurance coverage that protects car owners in case the amount of compensation received due to a total loss is not enough to cover the debt owed for a car financing. If the settlement is made at $15,000 and the debt is $20,000 GAP will pay the $5,000 balance. You should, therefore, take the policy if your car was bought through a financial program.

Visit Jeff D'Ambrosio Auto Group for more information.
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